A Playbook for the Public Sector

8 STEPS TO PROCURING ePROCUREMENT:

Page 2 of 16

TABLE OF CONTENTS

4

11

6

3

8

12

13

14

15

STEP ONE

STEP FOUR

STEP TWO

STEP THREE

STEP FIVE

STEP SIX

STEP SEVEN

STEP EIGHT

Introduction

Embrace Current Challenges and Define Future Goals

Build the Business Case for the Procurement Solution That is Best for Your Agency

Solicit Stakeholder Feedback and Support – and Do It Early

Decide How to Procure an eProcurement Solution

Select the Right Solution – and the Right Partner

Plan Diligently – and Plan for the Unexpected

Execute, Evaluate, and Refine

Don’t Forget to Document, and Share, Your Success

Page 3 of 16

Conservative estimates suggest that reform of government procurement practices, many of which have been in place for decades without change, could save 5 to 10% of total spending. And that’s just the start. eProcurement technology platforms have proven to deliver a host of benefits to federal, state, and local government entities.

However, there still remains confusion as to the purpose and capabilities of an eProcurement system among many in the public sector. Some consider eProcurement to be, in its most basic form, the electronic publishing and receiving of solicitations. Others define eProcurement as the holistic digitalization of the procurement function; the complete transference of purchasing processes, documents and communications to an electronic system. While there are varying levels of eProcurement utilized in the public sector today, the ultimate goal should be to automate the full procure-to-pay process efficiently and intelligently.

eProcurement – or electronic procurement – is gaining widespread attention within the public sector as agencies at all levels begin to evaluate the best technologies to facilitate a full,

and future-proof, digital transformation.

INTRODUCTION

A recent Center for Digital Government survey of 138 government, IT and procurement decision-makers found 31 percent of respondents don’t have a portal or eProcurement system where they can post bids and RFPs online – a fundamental capability necessitated in today’s modern procurement environment.

ROOM FOR IMPROVEMENT

Business Intelligence

eSourcing / Quotes / RFPs /

eCatalogs

Vendor Registration / Management and Bidding

Contract Management

Government-to-Business Punchouts / Requisitions

Invoicing / Accounts Payable

Page 4 of 16

Procurement is how governments get work done — from rebuilding infrastructure to modernizing technology to overhauling school curriculum. However, manual and legacy procurement processes tend to add cost, cause delay and reduce agility, while creating a host of other challenges. This is resulting in a rapid uptick of procurement modernization initiatives, which is great news.

Before you can make any changes to improve your procurement function, though, you must first complete a baseline analysis of its “health.”

It has probably been several years since you last conducted an in-depth audit of your entire purchasing process or, quite honestly, even researched the many modern procurement technologies available in the marketplace. Whether you are eager to make a few small changes to your procurement processes or overhaul your entire procurement function, it is important that you first identify current pain points, the root causes of those issues, and your ideal outcome(s).

Sample Challenges: Where Am I Starting?

We are still using manual processes; we need to digitalize our procurement function

We lack visibility into our spend, which makes it difficult to identify duplicate purchases or make adjustments to vendors/contracts extract more value

We know we need a best-of-breed eProcurement system, and we don’t currently have an ERP solution. However, we don’t have executive support for ePro

We have a new ERP-based procurement system, but it is a bad system and is hurting more than helping; we need to make the case for a standalone ePro system

I just realized that my eProcurement system is not the best out there, and it is no longer supporting my needs

We have an ERP upgrade in the works, but my current system is insufficient and I can’t wait another month, much less another year, to make a change

Embrace Current Challenges and Define Future Goals

STEP ONE

Page 5 of 16

Sample Goals: Where Do I Need to Go, and Why?

Just Don’t Forget to Document and Analyze “As Is” Business Processes

What else do you want to achieve?

Place the steps into a flowcharting software program in a swim lane format, i.e. process map. This will help you clearly identify process re-engineering requirements as you overhaul your

technology system and modernize the entire procurement function.

Increase supplier diversity and/or participation from Certified Business Entities (i.e. small, local, women-, minority-, or veteran-owned businesses)

Increase visibility, create transparency and enhance accountability

Increase competition to improve quality and value

Identify what’s needed to perform the process and where it comes from (e.g. paper, web, fax, etc.)

Improve resource utilization

Identify who completes each activity

Introduce more effective spending controls

Create system that facilitates easy local agency purchasing off statewide contracts

Centralize procurement function

Identify the start and end points of the process.

Reduce processing times for purchase requests

Identify what’s produced by the process

Automate procure-to-pay workflows

Establish a framework that can support new green purchasing standards

Embrace Current Challenges and Define Future GoalsSTEP ONE

C O N T I N U E D

Page 6 of 16

Build the Business Case for the Procurement Solution That is Best for Your Agency

STEP TWO

Begin to Develop Your Business Case…

And Your Budget...

List the pros/cons of each

Identify missing functionality

Determine the degree of interfacing integration across the systems

Baseline ERP module or homegrown system

Best-of-breed eProcurement advantages

Hybrid options

Consider quantifiable costs and benefits

Consider the immediate and long-term risks of going with the ERP vs. eProcurement or compromising on functionality/capabilities by not selecting best-of-breed

Perform Financial Analysis

Prepare a Funding Plan

• Quantifiable benefits and costs• Non-quantifiable benefits and costs

• Determine funding options for consideration• Develop proposed funding model that is fair

and equitable• Draft budget issue for consideration by

project sponsors and governing authority

Page 7 of 16

Build the Business Case for the Procurement Solution That is Best for Your Agency

STEP TWO

C O N T I N U E D

Then Prepare Your Business Case Analysis Report

A Word of Caution

Once you complete this exercise, it will be easier to identify potential remedies to current challenges and decide which type of

procurement technology platform is best for your agency.

Not all procurement problems can be solved using software alone. Although technology can and should be utilized to facilitate change, it is only possible to make meaningful improvements and sustain a long-term return on investment if you simultaneously overhaul your business

processes or address statutory obligations and restrictions.

Executive Summary

Alternative solutions for moving forward

Scope and approach

Detailed discussion of financial analysis and results

Analysis of existing ERP systems environment

Recommendations & high-level implementation plan

Page 8 of 16

Solicit Stakeholder Feedback and Support – and Do It Early

STEP THREE

No purchase decision is going to be made in a procurement silo. Given the tight integration of eProcurement systems with other agency functions, and the direct impact that procurement has on the success of government initiatives, it is critical to involve all stakeholders in your decision making process in some capacity. Present your business case

and seek input not only from your procurement team, but from finance, IT and even upper management. These key personnel will serve as either influencers or decision makers – or both. Without their unified support, or at least understanding, it may be challenging to secure approval for any eProcurement technology purchase.

Recruit a “Champion” for Your Cause from Upper Management…

Then Build Your Winning Team for Project Execution.

CIO

Finance/accounting department

Governor, mayor or other

civil leader

Procurement leaders and

users

CTO

IT department

CFO

Legal department/

auditors

Page 9 of 16

Solicit Stakeholder Feedback and Support – and Do It Early

Prepare for The Ultimate Showdown: Deciding Which Procurement Technology Solution is Best

C O N T I N U E D

STEP THREE

Athough many public sector CIOs may advocate for procurement to be conducted via the ERP, and many public sector procurement professionals will push for a

best-of-breed eProcurement system, the ideal technology solution to facilitate fast procurement modernization may indeed be an eProcurement system that lives

outside of – but remains tightly integrated with – the core ERP.

The Real Win-Win: A Hybrid ePro-ERP ApproachThis type of compromise does not require procurement to wait until an ERP upgrade

is complete a year, or three years, from now to start introducing new efficiencies. A best-of-breed solution can be integrated with existing systems and on-boarded

immediately and then later integrated with new or upgraded finance, human resources or ERP systems. As a result, buyers gain access to fully-functioning

eProcurement system within weeks or months, and other agency stakeholders maintain full access to cross-functional business systems – and critical procurement

data – as incremental technology upgrades occur.

Page 10 of 16

Solicit Stakeholder Feedback and Support – and Do It Early

C O N T I N U E D

STEP THREE

Still Facing Challengers?

Examples of Proof Points to Compile

Your credibility or relationship with C-level leaders may not be enough to secure their support for your cause. Before you can plea your case to decision makers, arm yourself with proof that your preferred eProcurement system is best for the entire agency. And you must be prepared to present that proof in a language each stakeholder will understand.

Whether you are advocating for your agency’s move to a standalone eProcurement platform

Case studies provide more than “proof of concept”. They are filled with stats, process descriptions, and testimonials that clearly demonstrate the value and feasibility of your preferred procurement technology solution in an environment that mirrors your own.

(because you don’t have an ERP) or the utilization of an integrated ERP/eProcurement system, you have to communicate the risks associated with not investing in an eProcurement solution, waiting for an ERP upgrade or – worse – not making any changes at all. Of course, be sure to tout the benefits of your recommended solution too.

See below for stats that will persuade.

Easy Integration

TIP: Use case studies to ‘prove’ your business case to other decision makers.

Better Resource Utilization

Cost Savings

Governor / Mayor

CIO / IT

CFO

49% of respondents said they desired a procurement solution that is easier to integrate into processes.*

40% of respondents said more efficient use of their staff time was among the top 3 benefits that attracts them to a best-of-breed eProcurement module.*

Money Talks. Best-of-breed eProcurement software cost less to implement and maintain than traditional ERP procurement modules. That’s the #1 reason why government agencies prefer ePro over ERP.

ePro offers tools that increase supplier diversity, deliver more value for every taxpayer dollar spent, which protects rainy day funds and allows you to deliver on promised infrastructure, programs, etc.. ePro also increases small, women, minority and veteran-owned business participation in solicitations, which builds goodwill among caucauses that appreciate the administration’s support of such business enterprises, especially those that return revenues to the local economy

ePro is easy to integrate with ERP; minimal burden on IT resources; eliminates redundant inputs; cloud-based systems are neat; the ePro vendor will lead integration so that you don’t have to worry about interfaces; ePro also provides visibility into project spend and quality - this transparency improves governance for high profile digital transformation project

ePro will directly interface with your finance system, so you will always have a single source of truth about spend, direct access to clean and complete data sets; increased visibility into spend will aid with budget planning and reporting

Whatever you do, be sure to speak your stakeholders’ language.

Use findings from third-party research, such as the data from this recent Center for Digital Government survey of 138 Government, IT and procurement decision-makers.

Turn to your peers for help building your case.

Page 11 of 16

Decide How to Procure an eProcurement Solution

STEP FOUR

Just like any other public sector technology purchase, there are many vehicles that can be used to solicit for an eProcurement system. To

determine which is best for your agency, consider the following:

Resources

Priorities

Solicitation Types

• How much time and effort can my staff dedicate to this project?

• Do I need to outsource most of the process analysis/re-engineering and system integration?

• What capabilities do I need immediately?

• What does my budget allow me to procure now vs. later?

• What parts of the project are most important to me and other stakeholders?

• What are the pros and cons of using a formal RFP vs. co-op or other type of solitication?

• Do I need to issue an RFI/RFQ first to ensure my project is even achievable within current budget/system /timeline parameters

Page 12 of 16

Select the Right Solution – and the Right Partner

STEP FIVE

Modern procurement technologies should be designed to simplify the purchasing process, protect taxpayer dollars and ensure fair competition.

However, not all procurement technologies are created equal. The only way to ensure that the best-of-breed eProcurement platform you plan to use is really the best for your agency is to develop a thorough requirements

checklist for reference during the evaluation process.

Be Sure to Ask the Right Questions

Sample Features and Capabilities Checklist

Customizable vendor management (registration, bidding, purchase orders/POs, etc.)

Self-service vendor model (vendor manages profile maintenance, electronic quoting, PO/change order pickup)

De-centralized informal quote support

Pre-encumbrance, encumbrance, and expense control

Out-of-the-box account NIGP or other classification code support

Configurable approval paths

Built-in audit trails that are tied to workflows and document processing

Multi-layered, enterprise-grade security ecosystem, including firewalls, intrusion detection, network partitioning, physical security, managed and hosting security services, threat management, disaster recovery, data encryption

eCatalogs that provide consumer shopping-like experience and automate/enforce contract spending

24/7 web-enabled application for easy access by all users and stakeholders

Full integration with third-party systems

Full-service process re-engineering, platform integration, on-boarding, training and post-launch support services by vendor team

Business Intelligence Reporting and Dashboards with advanced filtering capabilities like top/bottom filtering, chart formatting, dashboard exports, and tree maps

Page 13 of 16

Plan Diligently – and Plan for the Unexpected

STEP SIX

Every successful digital transformation requires a well-defined strategy. Once you have convened all parties involved in your procurement

modernization effort, it is time to map out a plan of attack.

Warning

Internal delays are possible and, quite frankly, to be expected. Have a contingency plan prepared. Factor delays into your timeline. Most

importantly, be flexible.

Validate Business Goals and Objectives

Communicate with All Parties

Outline Your Vision

Begin with the End in Sight

Establish Project Management Structure and

Standards

Be Willing to Compromise

Develop, Maintain, and Refine (as needed) a Detailed Project Plan

with a Timeline

Keep Pursuing

Page 14 of 16

Execute, Evaluate, and Refine

STEP SEVEN

The project does not end once you “go live.” In fact, it is almost more important to conduct an in-depth analysis of eProcurement system performance in the months immediately following launch

than during beta testing.

Develop a set of both quantifiable and intangible key performance indicators (KPIs).

Consistently solicit feedback from both end-users and the integration team.

Identify gaps in capabilities once real-world applications are tested on a mass scale. Incrementally on-board new system features as needed.

Maintain a support team that can address technical issues in real-time.

Analyze both the technology and associated processes simultaneously to ensure they are in sync. Be prepared to adjust workflow rules or define new processes if needed to facilitate more efficient procurements in the modern technology system.

Don’t forget to train end-users thoroughly on the new system; this will minimize productivity disruptions during the transition

Page 15 of 16

Don’t Forget to Document, and Share, Your Success

STEP EIGHT

It is so important to showcase your project’s success both internally and externally. Not only does this build credibility for you and your team, but it shines a spotlight on your superiors.

Give credit where credit is due – to IT, vendors, and certainly your government’s leadership.

Develop case studies, leverage social media, and be willing to talk to media to tout the impact of your procurement modernization efforts on both your agency, larger government, and the local economy – to include the businesses and taxpayers benefiting from streamlined procurement processes.

Develop internal newsletters, or host public events, to showcase the benefits of your new procurement system. This will help to recruit vendors (which will increase competition) and internal agency users/local agency users (which aids with procurement standardization and centralization efforts).

No matter the communications channel, remember to talk about change agents during the implementation. This will help you demonstrate the

extensive effort that was put into making this project a success while aiding with the documentation of “lessons learned” and best practices for future

implementations by both your agency and others in government.

We eradicate waste and maximize the value of every dollar you spend. This is our purpose. It guides everything our company

does – from product development to customer interaction.

To learn more, visit

www.periscopeholdings.com